CHICAGO, March 7, 2011 /PRNewswire/ -- Zacks.com Analyst
Blog features: MetLife Inc. (NYSE: MET), American
International Group Inc. (NYSE: AIG), Goldman Sachs Group
Inc. (NYSE: GS), Citigroup Inc. (NYSE: C) and Credit
Suisse Group AG (NYSE: CS).
(Logo:
http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Get the most recent insight from Zacks Equity Research with the
free Profit from the Pros newsletter:
http://at.zacks.com/?id=4579
Here are highlights from Friday's Analyst Blog:
MetLife Allows AIG to Raise
Executing the terms of the American Life Insurance Co. (ALICO)
deal sooner-than-expected, on Tuesday MetLife Inc. (NYSE:
MET) gave its consent to American International Group Inc.
(NYSE: AIG) for selling 78.2 million of MetLife shares and 40
million common equity units that AIG had received as part of its
ALICO sale to MetLife, in November last year. Earlier, AIG was
supposed to retain MetLife shares until at least August 2011.
Besides, MetLife announced a public stock offering of 68.6
million shares, the proceeds of which will be utilized for buying
back its preferred convertible securities from AIG. While such
securities could be converted to common shares, MetLife is expected
to scrap these contingent convertible securities.
On Wednesday, MetLife further announced the pricing of these
shares in transaction. While the AIG's sale of 78.2 million shares
and MetLife's public offering of 68.6 million shares, totaling
146.8 million shares, are priced at $43.25 per share, the 40 million common equity
units received by AIG are priced at $75 a share.
MetLife had paid for the $16.2
billion ALICO deal with cash of $7.2
billion and securities worth about 215 million common
shares. Hence, AIG will now be able to cash in the remaining booty,
which will further help the company in repaying the government
bailout loan.
Meanwhile, AIG expects to use about $6.3
billion of the proceeds from the sale of MetLife shares to
reduce the $18.2 billion loan that it
owed to the US Treasury. In January this year, AIG repaid the
$21 billion loan to the Federal
Reserve Bank New York (FRBNY) while also successfully completing
the recapitalization program.
However, FRBNY still holds many of the $50 billion worth of complex derivatives that it
took off AIG's balance sheet. Overall, AIG is yet to liberate
itself from its commitment to the government, who still owns about
92% of the company's equity, which was received as part of the
recapitalization program, and is worth about $79 billion at current prices.
The whole ALICO deal was carried out by Goldman Sachs Group
Inc. (NYSE: GS), Citigroup Inc. (NYSE: C) and Credit
Suisse Group AG (NYSE: CS), who were the book-running
managers.
AIG also expects to retain about $3.0
billion of the remaining proceeds from the sale of MetLife
shares to help MetLife tackle any legal issues that may arise due
to ALICO in future.
On the other hand, MetLife is on a development and restructuring
mode to address the economic volatility. While the company is set
to wind up its operations in Taiwan by the end of April this year, it also
added global life insurer– ALICO – to its portfolio.
ALICO is expected to diversify MetLife's income sources while
also mitigating the risks arising from other core operations of
MetLife in the US, primarily the auto and home segment. This gets
reflected by the management's assumption of a 30% growth in
premiums, fees and other revenues, in the range of $45.8–$47.0 billion, in 2011.
Further, this growth momentum is also expected to contribute to
the return on equity, which is estimated to be about 11% for 2011.
MetLife has also increased its investment portfolio by about 25%
with the inclusion of ALICO.
Want more from Zacks Equity Research? Subscribe to the free
Profit from the Pros newsletter: http://at.zacks.com/?id=5514.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and
qualitative analysis to help investors know what stocks to buy and
which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly
traded stocks. Our analysts are organized by industry which gives
them keen insights to developments that affect company profits and
stock performance. Recommendations and target prices are six-month
time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides
highlights of the latest analysis from Zacks Equity Research.
Subscribe to this free newsletter today:
http://at.zacks.com/?id=5516
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc.,
which was formed in 1978 by Leonard
Zacks. As a PhD in mathematics Len knew he could find
patterns in stock market data that would lead to superior
investment results. Amongst his many accomplishments was the
formation of his proprietary stock picking system; the Zacks Rank,
which continues to outperform the market by nearly a 3 to 1 margin.
The best way to unlock the profitable stock recommendations and
market insights of Zacks Investment Research is through our free
daily email newsletter; Profit from the Pros. In short, it's your
steady flow of Profitable ideas GUARANTEED to be worth your time!
Register for your free subscription to Profit from the Pros at
http://at.zacks.com/?id=4580.
Visit http://www.zacks.com/performance for information about the
performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook:
http://www.facebook.com/ZacksInvestmentResearch
Disclaimer: Past performance does not guarantee future results.
Investors should always research companies and securities before
making any investments. Nothing herein should be construed as an
offer or solicitation to buy or sell any security.
Contact:
|
|
Mark Vickery
|
|
Web Content Editor
|
|
312-265-9380
|
|
Visit: www.zacks.com
|
|
|
SOURCE Zacks Investment Research, Inc.